The Hindu : Steel industry welcomes cut in siding costs

Online edition of India's National Newspaper
Thursday, Feb 27, 2003

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Business

Steel industry welcomes cut in siding costs

By Our Staff Reporter

KOLKATA FEB. 26. The steel industry, especially those supplying to the Railways, are satisfied to say the least about this year's Rail Budget. Apart from the reduction in freight tariff, the industry has lauded the Union Railway Minister's stress on reducing siding costs and incentives to siding owners. Siding is a major activity for steel makers.

V. S. Jain, Chairman-cum-Managing Director, Steel Authority of India (SAIL), estimates 2-2.5 per cent benefit worth around Rs. 2,000 crores on inward and outward freight. In this regard, the reduction in tariff in the 100 km range received special appreciation from Mr. Jain. More importantly, with major thrust on track renewal, gauge conversion, laying of new tracks and others, the company expects good demand to persist for its Bhilai Steel plant. Bhilai is now the only supplier of rails to the Railways.

Earlier in his budget speech the Union Railway Minister, Nitish Kumar, said the railways would undertake a "thorough review to reduce the cost charged to the private siding owners, in a phased manner". In addition to the freight concessions the budget has awarded the siding owners generating earnings of more than Rs. 25 crores annually an additional rebate of 2 per cent on every Rs. 5 crore incremental revenue (over the previous year).

"We are yet to make a detailed analysis and would not comment till then," said V. K. Naidu, DGM, IOC, from Mumbai.

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